Parcel - February 2008 - (Page 22) operations PERFECTING YOUR SUPPLY CHAIN Whether it’s global or domestic, the supply chain is changing By David Jacoby W hen they ask me what the profile of the ideal logistics job candidate is, I’d say it is an Arabicspeaking Chinese national with a Finance MBA, APICS certification and a criminal record for hacking into Customs (successfully). The key success factors for logistics professionals have changed. Today, you need IR, ROI, CSCP and IT. average, companies that source from Asia net 18% savings on their largest-spend category (and much more on smaller volume and lower-value purchases), making sourcing a strategic imperative. No wonder they project a 70% increase in low-cost country sourcing by 2011. While China is the sourcing location chosen by a margin of more than two to one, other countries, such as those in the Middle East, Eastern Europe and Latin America, are becoming equally attractive. Formulating the right manufacturing and sourcing strategy requires context, education, information and wisdom from experience and, sometimes, hard-learned failure. Some companies are bringing back manufacturing or trying to decide what combination of products and services to offer to win in the new and more competitive game (a new study is helping manufacturers decide what strategy to pursue; a link is at www.bostonlogistics.com). But business success in the new global economy is not just about analytics. The most important success factors are interpersonal and cross-cultural skills, language skills and, above all, a sense of humor and flexibility to accept and appreciate cultural differences along the way. IT (Information Technology) While at a financial analysts’ meeting in New York recently, a Wall Street analyst asked me what kind of consulting I did, and I replied that I did supply chain consulting. Thinking that she had met Fred Flintstone, she asked in disbelief, “Isn’t that all done automatically today?” Supply chains have truly become about the management of information more than the movement of goods. We have a much higher degree of customer interaction than ever before. So we exchange data and information with them, both through channels such as EDI and XML, and also through informal channels such as connected networks and wireless access. This means that data security is a requirement for doing business (and data security is another form of supply chain security, since security means preventing information from getting in the wrong hands). And even if you are shipping products, value-added services — and more specifically, value-added information services — are becoming an important part of your business. ROI (Return on Investment) Financial skills are increasingly important in the world of collaborative supply chain management. Extended supply chain management crosses business unit, divisional, regional and company boundaries. Instead of each player having a clear territory, many have a smaller, shared role in a longer supply chain. Costs and benefits are distributed amongst multiple trading partners, raising questions about costs and benefits. For example, in a long supply chain where upstream and downstream partners benefit from RFID, which one(s) should bear the burden of investing in the tags and software? Volatility has also magnified the need for financial skills. Uncertain fuel costs have led carriers, especially airlines, to become experts at hedging, analyzing profitability by customer and route, www.PARCELindustry.com IR (International Relations) Asian sourcing has transformed most manufacturers’ supply chains over the last decade, either directly or indirectly. On 22 February 2008 http://www.bostonlogistics.com http://www.PARCELindustry.com
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